In recent years, the United States’ annual homeownership rate has risen from 1.3 to 65.5 percent, yet the rate for Black American homeownership remains the lowest among other racial groups, according to a recent study conducted by the National Association for Realtors. As a result, the organization is spearheading several initiatives to support an increase in Black homeownership.
The organization’s 2022 Snapshot of Race and Home Buying in America highlights trends as well as challenges related to homeownership. Within the report, NAR examines race and regions to identify racial disparities existing in the housing market.
The homeownership rate for Black Americans lags behind other racial groups. An estimated 43 percent of Black Americans are homeowners, compared to 72 percent of White Americans; 61.7 percent of Asian Americans and 51.1 percent of Latino Americans.
“As the gap in homeownership rates for Black and white Americans has widened, it is important to understand the unique challenges that minority home buyers face,” said Jessica Lautz, NAR vice president of demographics and behavioral insights in a press release. “Housing affordability and low inventory has made it even more challenging for all buyers to enter into homeownership, but even more so for Black Americans.”
The reasons for Black Americans to have the lowest rate of homeownership is nuanced — ranging from less access to down payment costs, higher debt-to-income ratios and long-standing housing discrimination practices. Highlights from the report include:
- Seven percent of Black and Latino mortgage applicants were likely to be rejected for loans compared to four percent of White Americans and three percent of Asian applicants.
- Black households – 41 percent – are the most likely to have student loan debt and also have the largest median student loan balance of $45,000.
- Black and Latino Americans – 14 percent and 12 percent respectively – were twice as likely as white Americans to use their 401(k) or other pension funds as a down payment source.
NAR is spearheading several initiatives to support an increase in Black homeownership, Bryan Greene, vice president of Policy Advocacy told Finurah.
“We care about the gaps existing with other groups and white Americans, but we care about Black Americans because it is the lowest and growing,” Greene told Finurah. “We want to tackle different barriers persisting in Black homeownership.”
NAR is on the steering committee for the Black Homeownership Collaborative, aiming to increase Black Homeownership by 3 million by 2030. Partnering with organizations such as the NAACP, National Urban League, and National Fair Housing Alliance, the goal is to increase access to homeownership through counseling, down-payment assistance, credit counseling and much more.
In addition, the organization is aware of inequities in the real estate industry, and has developed implicit bias videos and classroom training to help curtail discrimination in the home-buying process. This initiative comes after the organization’s president had to apologize for past discriminatory practices.
“We don’t want agents willfully discriminating in our ranks,” Greene said. “We don’t want agents who practice discrimination. We are emphatic that the federal government should address unlawful discrimination.”